Using strategic game theory, this innovative book carefully reviews the detailed negotiations between industry, regulating agencies and third parties in environmental policy implementation. The analysis is underpinned by an institutional comparison of German and US administrative and environmental law. After presenting an alternative model to address real-world bargaining, Markus Lehmann provides an economic rationale for the use of case-to-case regulation, a policy instrument traditionally neglected if not rejected by environmental economists. He discusses how and to what extent the shortcomings of this instrument can be overcome by a specific institutional design. He presents a clear-cut policy conclusion which is shown to be quite robust under different model structures and varying sets of assumptions.

This pathbreaking study will be essential reading for economists studying environmental economics and political economy, political scientists working on policy implementation and design, as well as lawyers interested in administrative law and standing, and the economic theory of the law.